Executive Summary

For poor people in rural economies, smart investments in agriculture are key to reducing poverty, building viable livelihoods and accessing affordable food. Unfortunately, for decades, under-investment in sustainable smallholder agriculture has left poor farmers behind. In the lead-up to the food price crisis of 2007–08, maize prices tripled and those of rice and wheat nearly doubled. As a result, millions of people were pushed into poverty. Poor people in developing countries are especially affected by high food prices because they spend on average between 60% and 80% of their incomes on food. While prices declined to some extent in the aftermath of the global financial crisis, the pressures that caused them to skyrocket just three years ago have not disappeared. In fact, they are once again pushing up prices and making them more volatile.

After more than two decades of neglect, donors responded to the wake-up call of the 2007–08 global food crisis. At the 2009 L’Aquila G8 Summit, the G8 and five other donors committed to provide $22 billion in financing for agriculture and food security, of which $6 billion was new money. They also promised to do the following: (1) deliver the funds within three years; (2) agree to a set of principles to guide how they would spend this money; and (3) remain transparent and accountable on their commitments. Twenty-seven countries and 15 international organisations signed a joint statement of commitment at the summit, bringing into existence the L’Aquila Food Security Initiative (AFSI).

Four months after the L’Aquila Summit, the G8 and other donors adopted the ‘Rome Principles’ at the World Summit on Food Security in Rome, Italy. The principles include country ownership, strategic coordination, a comprehensive approach, multilateral improvement and support, and sustained commitment. Donors also made several additional core commitments to increase the effectiveness of investments in agriculture and food security. These included focusing on gender, environmental sustainability and transparency. Soon thereafter, the US government calculated the potentially massive outcomes of the AFSI: 40 million poor farming families, most of them living on less than $2 per day, would be on track to increase their incomes by 250%.

Food insecurity is a global challenge that requires a diverse response, including support from the emerging economies of the G20 and, most importantly, political will and financial resources from developing countries themselves. Yet it is critical that traditional donors remain accountable and that they lead by example in order to leverage action by others.

This report provides a principle-by-principle and country-by-country assessment of progress against both financial and non-financial AFSI pledges, focusing on the G7 and the European Commission (EC). Overall, ONE found that donors are still falling short of their commitment to mobilise $22 billion by the end of 2012, and that the qualitative challenges are not being approached with the political will and momentum needed to show a strong commitment to ending poverty and chronic hunger. Within the AFSI, donors did not agree to consistent pledge years or a uniform system for measuring progress. For example, most donors agreed to report financial progress in disbursements, but the US, Germany and Japan specified that their pledges would be measured in appropriations or commitments. Most donors are making an effort; however, this report shows that there is substantial room for improvement.

KEY FINDINGS
Donors have disbursed only 22% of their financial pledges to date, and most have not reported how they plan to reach the full pledged amount. The eight donors assessed in this report reported disbursing $2.5 billion, or 11% of the AFSI pledge. Together these countries account for 84% of the total financial pledge. Canada and Italy have disbursed more than two-thirds of their pledges. France, the UK and the US need to make substantial disbursements in order to be on track. Two years into their pledge periods, they have fulfilled only 28%, 30% and 2% respectively of their pledges. [1] Meanwhile, Germany, Japan and the EC are difficult to assess because they have not yet reported any disbursements, for various reasons. [2] Overall, donors are making some progress, but they are not on track to fulfil their promises within the three years promised.

In order to fulfil their promises on the Rome Principles and core commitments, even though they all show some signs of progress, donors need to make significant improvements in every area. From principle-by-principle and country-by-country analyses, ONE concludes that:

• Most donors are not making a strong enough effort to invest in country-led plans, but their commitment to supporting the Comprehensive Africa Agriculture Development Programme (CAADP) is a good first step.

• While each of the eight donors assessed is a member or a funder of at least two of the five key coordination mechanisms mentioned in the AFSI Declaration, donors could do more to foster strategic coordination at the regional and national levels.

• Donors have made progress in taking a comprehensive twin-track approach to food security, especially towards the root causes of the food price crisis. Of particular note, France has elevated the issue of food price volatility and food security during its 2011 presidency of the G8/G20.

• With the exception of the UK’s multilateral aid review, donors have not reported taking any concrete steps to improve the effectiveness of multilateral organisations involved in food security. Additionally, only Canada and the US have made contributions to the Global Agriculture and Food Security Programme (GAFSP), which aims to fill financing gaps.

• The US has created a five-year initiative and has changed its bureaucratic structure to ensure the longevity of its focus on food security. No other donor has made pledges or policy changes beyond its initial three-year pledge period. Canada’s funding has already fallen to pre-AFSI levels.

• Progress on targeting women and integrating gender sensitivity into development plans is mixed.

• Donors need to improve their commitment to integrate environmental sustainability into their agriculture and food security programmes.

• Donors must make significant improvements to achieve transparency and accountability on the L’Aquila promises. The Deauville G8 Accountability Report of May 2011 failed to review the progress that donors have made using a uniform system of measurement.

While donors collectively are making insufficient progress on their L’Aquila promises, a three-year commitment to spend $22 billion on driving agricultural growth and combating food insecurity is not enough to tackle the challenge of global food insecurity in its entirety. It can make a significant dent, however. And because food prices are rising again and driving millions of people back into poverty, donors cannot afford to wait. Efforts to meet these promises must be reinvigorated in order to stave off future crises and create the necessary enabling environment to incentivise investments from the private sector and national governments. The G20 must also be encouraged to play a role.

As the G20 strengthen their role in development and food security, they should pave a pathway for an improved agenda for agricultural development and food security. At the upcoming G20 Summit in Cannes, France in November 2011, the G20 should commit to:

Fulfil their L’Aquila commitments

• Urgently and rapidly fulfil the L’Aquila commitments on aid quality and quantity for agricultural development and food security.
• The US should fulfil its outstanding pledge of $308 million to the GAFSP, and other countries should pledge additional monies to improve multilateral coordination for funding country-owned agricultural development and food security programmes.

Reduce food price volatility

• Make more information publicly available about grain stocks, and refrain from export bans to help prevent extreme food price spikes and to temper price volatility.
• Create position limits for food commodity futures on financial markets.
• Require all derivatives of food commodities to be subject to notification, clearing and monitoring by making position information publicly available.
• Establish a regulatory body, similar to the US Commodity Futures Trading Commission (CFTC), for futures trading in European and other markets.

Build on the AFSI to include emerging donors, more transparency and accountability, and commitments through 2015.

• Create equal partnerships between donors and recipients in the design and implementation of development assistance for agriculture and food security.
• Emphasise the need for investments in agriculture, food security and nutrition that target smallholder farmers, especially women, and that integrate environmental sustainability.
• Ensure that investments in agricultural risk management and social safety-net programmes ease the impacts of current price spikes and build the resilience of poor people to withstand future shocks.
• Ensure that public investments incentivise private sector investment and leverage innovative sources of finance.
• Improve transparency and accountability of delivering on promises by agreeing to:

• A unified and consistent reporting standard
• OECD DAC indicators to identify whether development dollars are targeted towards the most vulnerable people
• Measurable outcomes and indicators and corresponding baselines to track progress.